Why are small and medium sized companies electing to stay private, raising money through private offerings instead of going public? This is a big question, but one that would benefit from serious ongoing examination. Perhaps, the ability to raise money through SEC registration and the freedom to provide liquidity through exchange trading are not carrots that could make suffering the stick of regulatory requirements a hurt worth enduring.

Legislators and regulators have constructed a complicated and burdensome regulatory system that imposes massive fixed costs on firms. At the same time, they have championed central clearing and the general standardization of financial products. Isn't it obvious that the combination of high fixed costs and product standardization results in small and medium sized firms losing business because they lack the scale to support the fixed costs and have no way to distinguish themselves with…

One of the biggest impediments to a fresh examination of existing rules is the political danger to any regulator of being seen as loosening a rule in any way, lest they be construed as capitulating to the financial industry. In a rational world, rules would be subject to continuous reexamination. But the broader question is whether reexamination means making a genuine assessment (perhaps resulting in the retraction of a rule that is no longer working) or continually adding new requirements.…

The SEC may want to consider this approach to disclosure: (i) make various social disclosures (e.g., compensation ratios and political contributions) optional, but (ii) require issuers to allow proxy voting periodically on the topics. If proponents of these disclosures are correct in asserting that shareholders want them, too, then the shareholders will support them. If the critics are correct, then shareholders will reject them. Such an approach would be consistent with Commissioner Piwowar…